The unprecedented COVID-19 pandemic has brought another strain to the already vulnerable international diamond industry, causing demand and supply shocks at the same time.
“We've never seen an atmosphere where commercial activity in the entire pipeline, let alone the entire luxury goods industry, has actually stopped,” said David Prager, De Beers executive vice-president corporate affairs.
The epidemic has devastated the retail sector in the United States – the world's largest diamond jewellery market and the pandemic's epicentre since late March – by limiting social contact, as well as widespread unemployment, financial instability, and lowered consumer trust.
Indeed, the country's consumer spending fell by 7.5 percent in March, the biggest monthly drop on record. 30 million people applied for unemployment insurance during the same time span.
A recent New York Times review of data collected by market research company Earnest Data – which monitors the debit and credit card transactions of 6 million Americans – found that jewellery spending was 75% lower in the week leading up to April 1 than in 2019.
Despite the fact that some states have begun to relax lockout controls, industry analysts warn that the retail jewellery sector will take time to recover.
Even before the pandemic reached India, where approximately 90% of the world's diamonds are cut and polished, the diamond manufacturing industry was already under strain.